How to Pick the Right Location for Your Next Practice

“In this world nothing can be said to be certain, except death and taxes.” – Benjamin Franklin

Well, you certainly picked a good career. If your spouse is a funeral director, you’ve got both bases covered.

You want to grow your practice. You may be considering opening and staffing an additional office in your market. You may be planning on collaborating with some financial advisors and looking for the right geography. Where do you start?

Many people think they have all the answers. Certain areas are rich; others are not. Unfortunately, your information may be dated or based on anecdotal evidence. You need hard facts.

One resource you can tap is the extensive research done every 10 years when the government gathers census data. Let’s consider five scenarios using the “QuickFacts” tool on the US Census website.

Scenario One
Wealth complicates taxes. Your new office should be established in a wealthy suburb. You’ve got the city center covered. Let’s assume your market is Phoenix, Arizona. Here is a list of seven cities in that market (including Phoenix) and their median household incomes.

• Anthem  $79,351
• Gilbert  $81,485
• Mesa  $48,259
• Paradise Valley  $134,097
• Phoenix  $46,881
• Queen Creek  $83,809
• Scottsdale  $72,455

So far, we’ve learned Scottsdale residents earn more than the folks in Phoenix. It appears the money lives in Paradise Valley. If you were basing your expansion strategy with wealth as the primary factor, you’ve got your answer.

Scenario Two
Where are people moving to? Entrenched wealth frequently means entrenched service providers. Where will I find the newcomers? Let’s look at population growth rates between April 2010 and July 2014 for those seven cities.

• Anthem  n/a
• Gilbert  14.8 percent
• Mesa  5.6 percent
• Paradise Valley  6.9 percent
• Phoenix  6.2 percent
• Queen Creek  22.3 percent
• Scottsdale  6 percent

What have we learned? First, this segment of census data isn’t available for Anthem. Second, Queen Creek has a 22.3 percent flow of incomers. They need services. Build there.

Scenario Three
How big are these cities? I want someplace that’s got a population that can support my business growth plans. These population figures are current as of July 1, 2014.

• Anthem  21,700*
• Gilbert  239,277
• Mesa  564,704
• Paradise Valley  13,663
• Phoenix  1,537,058
• Queen Creek  32,236
• Scottsdale  230,512

What have we learned? For a big-city environment with wealth, open the office in either Gilbert or Scottsdale. For a medium-sized city with significant growth, Queen Creek might have 32,236 residents, but they have a 22.3 percent growth rate. What about that asterisk? That’s 2010 data. The census isn’t current on everything.

Scenario Four
Let’s assume retirees have simpler taxes than working professionals or business owners. They have time on their hands, too. You want a new market with plenty of people under the retirement age of 65. The following is the percentage of people age 65 and older who reside in the seven cities.

• Anthem  10.2 percent
• Gilbert  6.1 percent
• Mesa  14.1 percent
• Paradise Valley  22.6 percent
• Phoenix  8.4 percent
• Queen Creek  5.2 percent
• Scottsdale  20 percent

Now, we are looking for the lowest number. Gilbert and Queen Creek seem to have a large segment of the population under the age of 65, implying a largely employed population.

Scenario Five
You don’t want to be driving between offices all day. How close are these places, anyway? Here are their distances from Phoenix.

• Anthem  32 miles
• Gilbert  23 miles
• Mesa  18 miles
• Paradise Valley  14 miles
• Queen Creek  37 miles
• Scottsdale  11 miles

We’ve learned they are all pretty close.

More Data
You’ve just scratched the surface. Want to find areas with a high proportion of college graduates, assuming better educations mean better jobs? It’s there. Cultural percentages because you specialize in the Latino or Asian markets? It’s there. Total number of businesses? It’s there.

Most important, all of this data is free, or more accurately, access is one of the benefits you receive as a taxpayer.